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Death of ‘Patent Troll’ Bill Is Mixed Blessing for Research Universities

Congress now seems unlikely this year to pass patent-reform legislation aimed at controlling so-called patent trolls. That’s both good news and bad news for the research universities that have been in the thick of the debate.

The bad news, according to John C. Vaughn, executive vice president of the Association of American Universities, is that there will be no new law, yet “there is a problem out there to be solved.” The good news, he says, is that proposals being pushed by the computer and information-technology industry, which many universities found “really quite problematic,” are unlikely to be enacted this year either.

“Patent trolls” is the more-colorful term for parties, also known as nonpracticing entities, that own rights to patents but don’t use them as the basis for products. Instead, they use them to extract payments from other companies by threatening to sue or actually suing for patent infringement.

On Wednesday, Sen. Patrick Leahy, a Vermont Democrat who is chairman of the Senate Judiciary Committee, announced that because there was “not sufficient support behind any comprehensive deal” on the issue, he was withdrawing his proposed bill from the committee’s agenda.

“Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions,” Mr. Leahy said in a written statement.

In the debates over patent reform, universities generally have been allied with patent owners at pharmaceutical companies and other major businesses in the Coalition for 21st Century Patent Reform. They opposed measures in the legislation that would have required more disclosures about patent licenses and “loser pay” provisions that could have made it riskier to pursue patent-infringement lawsuits. (Their opposition is explained in this post about the concerns over patent trolls that came up when Pennsylvania State University held a patent auction this spring.)

Mr. Vaughn, whose organization represents 62 top research universities, said some of the technology companies in the tech industry’s Coalition for Patent Fairness had painted the universities’ stance as seeking to weaken the legislation. But Mr. Vaughn said that the diversity of the parties aligned with the universities’ position showed that their opposition was “not empty obstructionism.”

During negotiations over the legislation, he said, universities “knowingly and willingly accepted some constraints on enforcement of patents” in the hope of reaching a compromise, but tech companies would not compromise. The Coalition for Patent Fairness did not reply to a request for comment.

Senator Leahy said that if the competing parties could agree on a proposal to curb patent trolls, he would bring it immediately before his committee.